Every week I speak with countless individuals requesting information about bankruptcy and whether it is right for them. I can almost guarantee that every week at least one of those individuals will have been served a lawsuit by one of the creditors. Usually, the story behind the law suit indicates one of two patterns:
The first is what I call the John Henry syndrome. (John Henry is the railroad worker that poured every last drop of energy into proving he could do more work than a machine. He ended up beating the machine after a days work, but then laid down and died. The untold portion of this story is that the machine was available to work the next day.) The John Henry syndrome is where the Borrower borrows money from the Bank (or Banks) and later falls on hard times.
Like John Henry, the Borrower does not accept defeat, but rather nobly does everything he can think of to keep his creditors at bay. Even though the Borrower does not have the means to repay all of his debts, the borrow starts draining all of his assets, such as 401k’s, life insurance policies, household furnishings, and bank accounts. Finally, when there is nothing left to give, the Borrower stops paying his debts. Lawsuits are filed. Judgments are entered. Garnishments are placed on paychecks and bank accounts. It isn’t until this point that the borrower decides to file bankruptcy.
The second is the Ostrich syndrome. This is where the Borrower realizes he cannot repay his obligations so he just puts his head in the sand and ignores his creditors. After all the ignored phone calls, lawsuits are filed. Judgments are entered. Finally, garnishments are placed on paychecks and bank accounts. Sooner than later, the borrower does not have enough money to make ends meet, and is forced into bankruptcy.
The Creditors don’t care about you or your living situation. They only thing they care about is getting their next payment from you. They will not stop. They will drain every last penny they can. If you are in the John Henry or Ostrich situation, seek legal counsel. Do not wait until it is too late and you no longer have any assets. Bankruptcy is designed to protect key assets delineated by the state and federal legislature. If you find yourself in a financial bind, don’t just start draining assets or stick your head in the sand.
If you need help figuring out what to do….call me, Benjamin Skinner, experienced Arizona bankruptcy attorney, for a free consultation at (480) 648-8975.